Daily Blast - July 2, 2019 - Lewis Brisbois Bisgaard & Smith LLP

In Lewis v. Ukran (June 26, 2019, B290128)__Cal.App.5th__, Division Four of the Second Appellate District Court of Appeal determined which party bears the burden of proof when reducing an award for future damages to present value. The Court of Appeal, in affirming the trial court’s actions, found that the party seeking to change an award of future damages has the burden of proving an appropriate method for reducing or increasing those damages (Slip opn., p. 3.) A copy of the opinion is attached.

In Lewis, plaintiff suffered injuries from having his motorcycle collide with defendant’s van. (Slip opn., p. 3.) Plaintiff subsequently sued defendant for negligence. (Ibid.) At trial, plaintiff testified that he was a Hollywood stuntman who had lost $40,000 from being unable to perform any roles he had been given during the year he sustained his injuries. (Id. at p. 4.) Plaintiff’s expert testified that plaintiff could have earned between $200,000 and $300,000 per year for the next fifteen years. (Id. at pp. 4-5.) The trial court found that defendant was negligent and awarded among other damages, $1.2 million for lost earning capacity and $300,000 for future medical expenses. (Id. at p. 5.) Defendant moved for a new trial contending, in part, that the award of future damages should have been reduced to their present cash value. (Ibid.) The court denied the motion, and defendant appealed. (Ibid.)

On appeal, defendant contended that the court should have reduced the damages to their present value in the absence of any evidence submitted by either party regarding appropriate discount or inflation rates. (Id. at p. 11.) The appellate court noted there is no case law in California that explains which party has the burden of proof in contested discount and inflation cases. (Id. at p. 12.) Additionally, there is a federal circuit split on the issue. (Ibid.) The Court of Appeal decided that it agreed with the opinion of the Ninth Circuit in Alma v. Manufacturers Hanover Trust Co. (9th Cir. 1982) 684 F.2d 622, 626, where the Ninth Circuit held that “it is the responsibility of the parties to produce evidence of the rate that is appropriate.” (Id. at p. 13.)

Based on the Ninth Circuit’s opinion, the California Court of Appeal held that “a defendant seeking reduction to present value of a sum awarded for future damages has the burden of presenting expert evidence of an appropriate present value calculation, including the appropriate discount rate, to enable the fact finder to make a rational determination on the issue.” (Id. at p. 14.) Since defendant did not present any evidence supporting his contention that the future damages awarded to plaintiff should have been reduced to their present cash value, the trial court was correct in not considering any kind of reduction to those future damages. (Ibid.)